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FAQs of the facility Investing for Employment (IFE)

Categorisation of projects

Can a local authority apply for a project in cooperation with a local association? If yes, will the project be Category 1?

Yes, this is possible as long as both applicants and the project itself meet the eligibility criteria. The categorisation depends solely on the project type: Category 1, not-for profit and non-revenue generating; Category 2, not-for profit but revenue generating.

Is a private training centre eligible in Category 2 or 3?

  • The categorisation depends on the legal status of the candidate and particularly on the type and nature of the proposed project investment. If the project is for-profit, then it will meet IFE criteria for Category 3, otherwise Category 2. In both cases, most of the jobs will be created within third entities (i.e., companies operating in the private sector).
  • The most relevant key performance indicator (KPI) for IFE CfPs is job creation (KPI 1). As such, the project must clearly demonstrate how it will create good new jobs (non-existing) in the private sector beyond the training opportunities.

Can a project funding the construction/equipment of a technology centre be considered in Category 1?

  • It depends on the candidate type and the project’s objective. If both are for-profit (profit-generating activity with dividends distributed) then Category 3 or Category 4 apply.
  • Please note that building and equipping a technology centre is not sufficient per se. The applicant(s) also need to be qualified to operate such a centre and be able to offer technical support to the users of the centre, either in-house or outsourced.

Is a PPP company that manages techno parks or industrial zones eligible to apply for Category 1? i.e., as a public infrastructure project with job creation?

  • Yes, but only if this project does not generate any revenues (which appears unlikely). However, if the project is for profit, then Category 3 or 4 apply.
  • Please note that in case of a techno park the applicant(s) also need to be qualified to operate such a centre and be able to offer technical support to the users of the centre, either in-house or outsourced.

Is the development and subdivision of an industrial zone belonging to a management company of a technopole with the aim of selling lots an eligible project? If so, does it belong to Category 1?

  • IFE does not finance real estate projects.
  • Please note that building and equipping a technology centre is not sufficient per se. The applicant(s) also need to be qualified to operate such a centre and be able to offer technical support to the users of the centre, either in-house or outsourced.
  • If the goal is commercial (profit generation and distributing dividends), then it falls into Category 3 or Category 4. Category 1 only applies to projects that do not generate any revenue (which appears unlikely in the case of industrial zones)

Can a private commercial company apply for a project in Category 2 (not-for-profit, revenue generating)?

Yes. However, the applicant will need to guarantee - in detail - that the project will continue as not-for-profit in the long-term period (i.e., cash-flow projects provided over a period of 15 years) and it has to demonstrate how generated revenues will be re-invested in the project.

Is a private commercial company eligible for projects of Category 1 or 2?

In principle yes, as long as projects fulfil the conditions of Category 1 or 2

Are universities and training institutions eligible for Category 1 (funding for training infrastructure, buildings and equipment)?

  • Only if the foreseen projects do not generate revenues (which appears unlikely)
  • It depends on the details of the project concept; training infrastructure projects are more likely to fall into Category 2 when they are carried out by public institutions and Category 3 when carried out by private companies. Category 1 is essentially only for basic infrastructure works (e.g., roads, energy and water facilities, and so on).
  • The most relevant KPI for IFE is creation of good and new jobs in the private sector (KPI 1). As such, the project should first clearly demonstrate how it will create such jobs in the private sector beyond the training opportunities.

Are all for-profit projects systematically classified in Category 3 or 4?

YES.

Can SMEs benefit from funding of up to 75% (Category 2) or 90% (Category 1), if projects have high added value in terms of job creation?

  • No, the size of the applying entity is irrelevant for its categorisation.

Is it possible for SMEs to benefit from funding up to 75 to 90% if the project has a high added value in terms of job creation?

NO, for-profit companies can only apply for Categories 3 and 4.

Can a project that envisages the construction of an hotel be considered in Category 1?

  • No, this kind of for-profit project is classified as Category 4.
  • Please note that the mere construction is not sufficient and applicants need to demonstrate professional capacity to operate the project upon its completion.

Is it possible to combine multiple categories within the same project?

  • No. If the project is made up of several components from different categories, then each component of the project should be presented separately.

If a project is not submitted under the correct and corresponding Category, will the application be rejected?

  • No, the categorisation will be adjusted by IFE and the amount of own contribution expected from the candidate will be revised according to IFE requirements for the corresponding category.
  • Yet, if the ultimate possible grant amounts drop below the minimum ticket size of 1 million EUR, then the project will no longer qualify for an IFE grant.
  • Notably, if the financial status of the applicant appears too weak or too low to cater for the increased own contribution, then during the evaluation process, the score might be reduced or the applicant disqualified.

Eligibility Conditions

Can local authorities participate in IFE CfPs?

Yes. Local authorities, as public entities, meet the eligibility criteria for projects in Category 1 and Category 2.

Are export-oriented companies located in free zones/industrial acceleration zones eligible?

Yes.

Can the same applicant (public or private) submit more than one project?

Yes. Each project must be submitted independently and it will be evaluated on its own merits. The applicant (i.e., individual) must demonstrate the technical and financial capacity to undertake and implement multiple projects running in parallel.

Can a consortium of companies submit multiple projects?

Yes. Each project must be submitted independently and it will be evaluated on its own merits. The lead applicant of the consortium must demonstrate the technical and financial capacity to undertake and implement multiple projects running in parallel.

What are the priority sectors?

IFE is open to all sectors. However, the ‘Exclusion List of KfW Group’ defines specific sectors that IFE does not finance. Please refer to: www.kfw.de/PDF

Are disadvantaged areas or populations far from the labor market a priority?

IFE does not prioritise or provides special considerations for projects that target disadvantaged segments of the society. Eligible applicants are encouraged to apply as long as the project meets IFE eligibility criteria.

Can financial partners (e.g., a commercial bank) provide financial statements on behalf of the applicant?

No, each applicant is required to submit its own application and related supporting documents, including financial statements. Financial statements must be audited in case of private commercial companies. Please note that banks are not eligible for IFE CfPs.

Are professional agricultural associations eligible? If so, in what categories are they placed?

Professional agricultural associations are eligible. The categorisation depends on the type of proposed project: Category 1, if the project is not-for profit and non-revenue generating; Category 2, if not-for profit but revenue generating; Category 3, if for-profit has wider job creation impact (within its own entity and within third parties); Category 4, if for-profit has job creation impact at its own entity level.

Is it possible to subsidise the activity of a microfinance institution to support micro enterprises?

Microfinance institutions are not eligible. Financial institutions are not eligible under the IFE CfPs, including commercial banks.

In case of a consortium, are the negative financial statements of one of the consortium members a non-eligibility criterion?

IFE expects from all members of a consortium to demonstrate a healthy financial situation, by respecting the following criteria:

  • Average yearly turnover must be greater than or equal to 50% of requested grant.
  • At least 2 positive EBITDA in the past 3 years.
  • A debt/equity ratio of max 4:1.

Is a project envisaging the expansion of a plant for creating a new production line in another African country eligible?

No, IFE only finances projects that create jobs exclusively in the country of the Call.

Are investments made prior to project approval eligible?

No, IFE grant only finances investments made from the date of the signature of the Grant and Separate agreements.

Do projects led by consortia have an advantage over those led by individual applicants?

No, though a consortium might provide combined financial capacity and former management experience as added-values for meeting IFE criteria.

Is a micro-credit financial support project eligible?

NO.

Are Public / NGO partnership projects eligible?

Yes, they meet the eligibility criteria for projects in Category 1 and Category 2. Or even Category 3 and 4 if the foreseen project pursues profit-making.

Is a youth capacity building project eligible?

A focus on youth capacity building may help you to earn some bonus points, but is not sufficient for receiving a grant. Each project needs to comply with the IFE condition as laid down in the Guidelines for Applicants.

Can a subsidiary company meet the eligibility financial criteria if the parent company provides the financial statements on its behalf?

If the project is too large for the subsidiary, then the parent company may apply as lead applicant. To keep in mind though that IFE will not finance projects that serve to refinance, restructure or rehabilitate a subsidiary or any company in general.

Are newly created or being created businesses eligible?

If your question refers to the status of a foreseen project, then our answer is yes. But if you refer to the status of the applying entity, then our answer is no. Please check the Guidelines for the eligibility criteria for the Applicant.

Does the lead applicant of the consortium have to justify at least 3 years of existence?

Yes, all applicants (i.e., individual applicants, lead applicant of a consortium and consortium members) must have been operating for at least three years.

When submitting the concept note, the project should be at what stage? Funding plan closed? Project in progress? Project completed, and since when? Possibility of refinancing?

  • The project’s concept must be mature and preliminary technical studies must be ideally in place to begin the project execution (construction of buildings, purchase of technical equipment, etc.) as soon as possible, at the latest 12 months after signing the financing agreements (i.e., Grant and Separate Agreements).
  • The funding plan must be fairly defined at the concept note stage and finalised at FPP stage. Pre-agreements (i.e., supporting documents to be enclosed to the application) must be in place for the participation of investors, ideally at CN stage and compulsory for the FPP stage.
  • Investments relating to activities already carried out cannot be supported or taken into account by IFE. IFE does not offer retroactive financing of already executed investments

Are projects applying for a Grant of less than 1 million EUR eligible?

NO.

Is there a maximum number of partners when the project is implemented by a consortium?

No, but each part of the consortium must play a relevant role in the project. Roles and responsibilities should be clearly defined in the concept note through a Memorandum of Understanding (MoUs) or any other supporting document that describes the outlines of an agreement that two or more parties have reached.

Is there a maximum duration for projects?

Yes. The exact duration depends on the nature of each project. The investment phase of a project may not exceed 24 months and must be concluded within 30 months after the financing agreements (Grant and Separate Agreement) are signed. The investment (i.e., infrastructural works, purchase of technical equipment, etc.) must begin no later than 12 months after the date of the signature of the Grant and Separate agreements. The operational phase should be carried out at a normal pace without interruption.

Eligible Costs

Is consulting support or technical assistance eligible for IFE funding (i.e., technical assistance for studies/analyses/training)?

Yes, but only during the investment period of the project and only if the Technical Assistance is closely linked to the investment and absolutely necessary for the realisation of planned operations.

Does IFE cover the management costs of the personnel who will be mobilised for the execution of the project?

These costs are part of the company's operating budget during the investment phase, and therefore not eligible. As an exception, fees of external experts engaged during the investment phase for training workers on machines that are part of the project are considered eligible.

Is working capital (i.e., liquidity levels of businesses for managing day-to-day expenses and covers inventory, accounts payable, accounts receivable) considered an eligible cost?

It is considered an eligible cost only and exclusively if required for a maximum of the initial 3 months of the operating period.

Are licences and legal costs considered part of the CAPEX?

Yes, they are. Annual maintenance costs are considered OPEX instead, and not eligible for the IFE grant as belonging to the operational phase.

Contribution expected of applicants

Can ‘intangible’ contributions be taken into account for the applicant's own contribution?

No. Intangible contributions are not eligible for IFE CfPs.

Must the applicant’s contribution be in cash, or can it be in the form of land, pre-existing buildings, etc.?

  • The applicant's financial contribution can be in cash or a combination of both cash and in- kind.
  • In-kind contribution:
    • Projects proposals involving exclusively in-kind contributions will not qualify.
    • Inflating the size or the value of the in-kind contribution could leady to disqualifying the project.
  • Cash-contribution must be of a minimum of 15% of the overall own contribution, and the applicant should demonstrate documentary evidence for cash contributions (signed MoUs, bank statements, etc.).

Can the applicant’s contribution be proposed in the form of services?

NO.

Is a contribution in the form of IT solutions or training curricula eligible?

Yes, but only in case the foreseen IT solutions or curricula is exclusively required for the foreseen project.

How will the applicant’s contribution in kind be valued and by whom?

The value of each in-kind contribution must be certified by legally registered consulting companies and/or consultants, and supporting documents should ideally be submitted already at concept note stage. IFE may require an own evaluation.

Can the applicant's contribution be in-kind in the form of already existing machines?

Yes, but subject to an independent assessment carried out by a legally registered consulting companies and/or consultants an approved expert. Existing fixed assets (i.e., buildings, land, technical equipment) must be an integral part of the project when approved. And the machines need to, exclusively for the use of the foreseen project.

Can the applicant's contribution be in kind (land, building, equipment, etc.)?

Yes, subject to an assessment carried out by an approved expert. Intangible contributions are not allowed. A minimum of 15% of the candidate’s contribution must be in cash (i.e., mandatory for all categories).

Is it possible for a public entity to present its own contributions in the form of intellectual services such as training, course design, creation of a specialized journal, writing of articles, academic teaching, access to bibliographic sites, etc.?

No. Intangible contributions are not eligible for IFE CfPs.

Can granted bank loans, company capital or other property belonging to the applicant be considered as applicant’s own contribution?

Yes. The applicant’s own contribution can stem from own funds, or loans or other type of financial support, including grants from third parties.

Can the applicant's contribution come from grants awarded in programmes independent from IFE?

Yes. Grants from third parties can be considered part of the applicant’s own contribution.

Can funding plan and cash flow projections be modified between CN stage and FPP stage?

Applicants can present an alternative cash flow projection with a reduced grant and increased own contribution and can endeavour to scale down the project, but to the extent that the project does not fall below 1 million EUR grant (minimum). Also, the project’s nature and objectives must not be changed.

Documentation to submit

What documents are expected to be presented from public entities in the application?

Public entities must demonstrate their ability to:

  • provide their share of co-financing, as per IFE requirements for the indicated Category ;
  • to exhaust the own contribution before the disbursement of the scheduled IFE grant;
  • to cover the operating costs of the project after the investment has been finalised. To do so, the public entity must provide information on its annual budget and upload a signed Letter of Commitment from a director or other authorised representatives committing the entity to make the required funds available.

Do the financial statements for the last three years have to be certified?

Yes, they have to be certified and audited (i.e., signed and dated) by an independent consulting company and/or consultants for private companies, which are obliged to have certified annual statements. Public entity, any other supporting document can be provided.

What are the expected financial statements in the event that a company plans to create a subsidiary dedicated to the project?

The certified and audited financial statements of the applicant (i.e., namely the parent company) must be submitted.

Do supporting documents in Arabic have to be translated into English or French by a certified translator?

All supporting documents in Arabic (i.e., financial statements, business licenses, etc.) must be translated into English or French at the concept note stage. Only shortlisted applicants will be required to present certified/notarised translations at the FPP (Full Project Proposal) stage.

Do financial data have to be expressed in EUR?

Yes, it is mandatory. Financial data in funding plans as well as cash-flow projections must be submitted in EUR. Only financial statements are accepted in local currencies.

Contact

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